ACI Worldwide Inc

NASDAQ:ACIW

Earnings Call Transcript 2019-Q3

[Operator]

Ladies and gentlemen, thank you for standing by, and welcome to the ACI Worldwide Q3 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Mr. John Kraft. Please go ahead, sir.

[John Kraft, executive]

Thank you, Patricia, and good morning, everybody.

Today's call, like all of our events, is subject to both safe harbor and forward-looking statements. You can find the full text of both statements on our website as well as with the SEC.

On this morning's call is our CEO, Phil Heasley; our CFO, Scott Behrens; and we also have Craig Saks, our COO.

Before we begin, I'd like to let everybody know that ACI will be attending Citi's 2019 Financial Technology Conference in New York next Tuesday and Wednesday, November 12 and 13. We will also be attending Stephens 2019 Nashville Investment Conference in Nashville next Thursday, November 14. In addition, we will be hosting our own ACI Analyst Days, both in New York and in London, on Tuesday, November 19, and Thursday, November 21.

With that, I'd like to turn it over to Phil.

[Philip Heasley, executive]

Yes. Thank you, John, and thank you, everyone, for joining today's call.

I'm pleased to report that quarter 3 was a strong quarter for ACI. As the digital transformation of payments accelerates around the globe, ACI's vision of Any Payment, Every Possibility continues to resonate with the market. We are growing our business organically across our 2 P&Ls. The acquisition of Speedpay, which closed in May, further propelled our results, bringing notable improvement in profitability and scale to our ACI On Demand platform. In addition, one of our delayed contracts from 2018 closed in quarter 3 with a major renewal and expansion, validating ACI's important role in the new payments ecosystem. We fully expect another one of these deals to close in the fourth quarter.

Also notable in the quarter, we have partnered with Microsoft and secured 2 significant acquirer clients running retail payments solution in the cloud on Azure following the successful proof of concept. One client will go live next week, and the other will follow shortly. In addition, our developer sandbox in Azure is also gaining traction as a way for our customers to build and test new solutions via our APIs.

As John mentioned, Craig Saks, ACI's Chief Operating Officer, is also with us today, and I'm going to have him spend the next few minutes providing additional commentary on the quarter and sharing a sampling of Q3 wins, which demonstrates ACI's momentum within our bank, intermediary, merchant and corporate customer segments. Craig will then turn over the call to Scott to cover the details of our Q3 financials. Craig?

[Craig Saks, executive]

Thank you very much, Phil, and good morning, everyone.

So I'll start with our ACI On Demand business. As Phil mentioned, we continued to grow organically and then layered on the Speedpay acquisition, which has brought improved scale and profitability to our platform. In Q3 2019, revenue for the ACI On Demand P&L was $193 million, up 85% from last year, and our net adjusted EBITDA margin improved to 20% from 5% in Q3 of last year.

We're also pleased to report that our Speedpay integration efforts are nicely on track to bring together the industry's leading U.S. bill pay portfolios into a single unified bill pay platform capable of supporting billions of transactions. We are also broadening the reach of ACI Speedpay moBills mobile wallet technology, which just received top honors from the Aite Group in its Digital Wallet Innovation Awards program.

Our solid bill pay foundation is fueling investment in higher growth opportunities for our platform, which includes secure e-commerce and machine learning-based payments intelligent solutions. In addition, we are developing real-time and recurring digital subscription payment capabilities to meet the converging needs of merchants, corporates and billers.

A brief sampling of a few ACI On Demand Q3 wins would include the peer group of insurance companies, a leading U.S. home and auto insurer, who selected ACI Speedpay to expand bill pay options for its commercial portfolio; Blue Cross Blue Shield of New Jersey has expanded its use of ACI's bill payment solutions; and Idaho Housing and Finance Association, a leading regional mortgage servicer, has selected ACI's bill payments to enhance its self-service channels.

On the merchant side of our portfolio, Lime Light CRM, a subscription management platform for e-commerce companies, selected UP Merchant Payments to support the online payment needs of its growing customer base; and a leading video game developer and eSports tournament organizer chose UP Merchant Payments as it expands its digital wallet and retail operations.

Shifting now to ACI On Premise. This P&L also reported strong quarterly results. In a year-over-year comparison, revenues increased 15% and net adjusted EBITDA margin improved to 62% from 55%. This growth was fueled by significant customer contract with a leading global bank technology and payment processor. This contract, which had been delayed due to industry M&A activity in Q4 2018, represents both a renewal and an expansion of ACI's technology. ACI will equip this newly combined organization for aggressive payments, digital transformation and transaction growth through its use of our UP Retail Payments solution, our UP Real-Time Payments solution, our UP Payments Risk Management solution and also our back-office solutions.

This organization selection of ACI's solutions validates the trend we have been seeing for the last several quarters. Banks, merchants and intermediaries continue to recommit to our foundational UP Retail Payment solution to power their core payments infrastructure while adding UP Real-Time Payments to manage growth in the immediate payments world as well as UP Payments Intelligence to manage increasingly sophisticated payment fraud risks.

Finally, as we noted each quarter, real-time payments continued to be at the heart of the innovation agenda for the majority of banks worldwide, and ACI is very much at the forefront of immediate payments deployments around the world.

Last quarter, you may recall, we announced a strategic investment with Mindgate Solutions in India. In Q3, we advanced our build-out of our joint payment solution that will combine ACI's proven Universal Payments processing software with Mindgate's excellent portfolio of digital overlay services for UPI transactions in India. I'm very pleased with the way our teams are working together, and ACI and Mindgate were featured as co-presenters at Money20/20 just last week in Las Vegas.

ACI On Premise wins and major milestones for Q3 would include some of the following. State Bank of India, the largest bank in India, signed a renewal to use UP Retail Payments and UP Payments Risk Management to meet its card and non-card-based transaction processing and fraud monitoring requirements, protecting hundreds of millions of accounts. A leading global financial services firm has expanded its use of UP Payments Risk Management for fraud prevention and detection for its debit cards business. In Europe, Rabobank achieved its final milestone in scaling up for instant payments as part of the Dutch SEPA Instant Payments launch. This provides immediate payment processing of mobile and online payments for consumers, enabling consumers to pay and receive money instantly at any time of the day, 365 days a year. In our Pacific region, Australia's leading provider of integrated financial services selected UP Real-Time Payments to simplify its current platform, address new and future business requirements and reduce time to market. In Latin America, Banco de la Republica, the largest bank in Uruguay, expanded its use of UP Real-Time Payments and UP Retail Payments to offer its customers innovative products and better connect to a growing fintech environment.

And finally, I'm proud to mention that ACI's technology continues to be recognized by industry awards. Our Payments Intelligence solution recently won the 2019 Global Banking and Finance Award where we were honored as the Best Enterprise Fraud Prevention Provider Europe for our multilayered approach to fraud detection and machine learning capabilities. We were also recognized as the best real-time payments solution provider at the Ovum Payment Innovation Awards.

Finally, before I hand over to Scott, I want to reiterate that we had a strong quarter across both our ACI On Demand and our ACI On Premise P&Ls. We are pleased to have closed a significant recommitment and strategic expansion contract with one of our delayed contracts from Q4 2018. This contract validates ACI's important role in the new payments ecosystem, and we look forward to ongoing growth with this customer. In addition, we are in the final stages of negotiation and expect to close another significant contract that has been delayed from 2018 due to the industry M&A activity.

And with that, I'll now turn it over to Scott to provide additional commentary. Thank you.

[Scott Behrens, executive]

Okay. Thanks, Craig, and good morning, everyone.

I first plan to go through the highlights of the third quarter and then provide our outlook for the fourth quarter and full year. I will then hand it back to Phil for some final comments before we open the line for questions.

I'll be starting my comments on Slide 6 with key takeaways from the quarter. Overall, we had a strong quarter with new bookings up 12% from last year. Importantly, as Phil and Craig have both mentioned, one of our contracts that was delayed due to customer M&A activity in late 2018 closed in Q3 with a major renewal and expansion, validating ACI's important role in the new payment ecosystem. We ended the quarter with 12-month backlog and 60-month backlog of $1.1 billion and $5.7 billion, respectively. Q3 revenue grew 45% over last year and came in above our expectations and at the high end of our guidance range. Excluding the impact of Speedpay, revenue was up a strong 9% organically. Recurring revenue increased to 69% of total revenue, up from 65% of total revenue in Q3 last year. Our solid revenue growth contributed to strong EBITDA growth, which was up 66% over last year.

Turning next to our 2 operating segments. Our On Demand segment grew revenue 85%, driven primarily from the Speedpay contribution and continues to deliver solid margin improvement, with our net adjusted EBITDA margins hitting 20% in Q3 this year compared to 5% last year. As we've been saying for some time now, the margin improvement will come with time and with scale as we grow the revenue into the infrastructure that we've built out over the last few years. Our On Premise segment grew revenue 15% and delivered adjusted EBITDA margins of 61% versus 55% last year.

Cash flow from operating activities was $32 million versus $29 million in Q3 last year. We ended Q3 with $122 million in cash and $1.4 billion in debt. And during the quarter, we spent $35 million repurchasing 1.2 million shares, and we have $141 million remaining on our share repurchase authorization.

Turning next to Slide 7 with our outlook. We continue to expect full year 2019 revenue to be in the range of $1.315 billion to $1.345 billion and adjusted EBITDA to be in a range of $360 million to $380 million, which excludes between $30 million and $35 million in onetime transaction and integration-related expenses. And with 7 weeks left in the year, I'd say we're comfortable with where consensus estimates are lining up with our full year revenue and EBITDA expectations. So on a constant currency basis, we saw a mid-teens new bookings growth here in Q3, contributing to double-digit organic revenue growth and expect Q4 new bookings growth and organic revenue growth to be even stronger double-digit growth as we exit the year.

So clearly, exiting 2019 strong, and we expect that momentum to continue into 2020. With that, we're comfortable reiterating our 2020 EBITDA outlook, which is expected to be in a range of $425 million to $445 million, and we plan to give more details regarding our 2020 outlook on our Q4 earnings call.

With that, I will hand the call back over to Phil for some final comments.

[Philip Heasley, executive]

Thanks, Scott. Thanks a lot.

Before we turn to Q&A portion of today's call, I have a closing comment. This morning, I announced that after an incredibly fulfilling 15 years with ACI, I have informed the Board that I plan to retire year-end as President, CEO and Member of the Board. The Board has been conducting a thorough search for my successor. I will serve in a consulting capacity for 3 months following my retirement to help provide for an orderly succession. Given our strong and experienced management team and the depth of our bench of talent at ACI, I am very confident that this will be a seamless process.

I look back on the last 15 years with great pride and satisfaction. We have developed a position as an innovative leader in the complex and involving digital marketplace. We've secured our operating model, and we've gained traction among key customer segments. Serving as ACI's CEO has been a great privilege for me. And I look forward to seeing ACI continue to achieve as well as prevail well into the future.

With that, operator, we are ready to open the line and answer all questions.

[Operator]

[Operator Instructions] Your first question comes from the line of Peter Heckmann from D.A. Davidson.

[Alexis Huseby, analyst]

This is Alexis on for Pete. Phil, sorry to hear that you'll be leaving us, but congratulations on your retirement.

[Philip Heasley, executive]

Thank you.

[Alexis Huseby, analyst]

Yes. So with the On Premise deal that closed, could you detail how the contract was expanded?

[Philip Heasley, executive]

Craig?

[Craig Saks, executive]

Yes, so a few things. First of all, they expanded it in terms of the time frame that they committed. There was an increase in volume that was committed. And we actually cross-sold an additional set of applications so they have an end-to-end solution for expansion in some new markets.

[Alexis Huseby, analyst]

Okay. Great. And then switching over to the On Demand segment. What was organic growth in the quarter? And then any areas you can point to outside of Speedpay that are contributing relatively more to growth within the segment?

[Scott Behrens, executive]

Yes. On Demand grew low single digits in the quarter. I think, importantly, you saw a lot of the growth year-over-year came from Speedpay, but the key driver there is the continued expansion in profitability. Last year with 5% EBITDA margins, this year with 20% EBITDA margin. So that's really showing the power of the -- and the scalability of the infrastructure that we've put in place.

[Philip Heasley, executive]

And the new digital products are growing.

[Scott Behrens, executive]

Correct.

[Alexis Huseby, analyst]

Great. Okay. And then I'll just squeeze one more in, if that's all right. So in the first 5 or 6 months now of owning Speedpay, could you update us on integration efforts, some of the focus areas for investment and then also if you've seen any uptick in any attrition from the Speedpay base?

[Philip Heasley, executive]

Actually, we are very, very proud of the Speedpay integration. It was -- it's a carve-out, which gives it a little bit different flavor, but the -- we brought on a wonderful management team that had a long and dedicated view of the business. They -- I wouldn't say that they were happier, but they were very happy that they joined a company that was so payments-focused. They brought with them a -- I think the customer-centricity of that group, I think, is a positive, and they brought some leadership as it relates to that. We have not seen attrition. The accounts are renewing very nicely, and we're going through it in a -- the relationships are actually in very good order. I mean the Speedpay is an acquisition that has brought great intrinsic value to us, and we feel very good about it. I don't know if you want to add.

[Craig Saks, executive]

Yes. Only 2 things I'd add. Great signs of good engagement from the customer base are that I'm seeing good cross-sell traction between both sides of the portfolio, in fact, which is nice. For example, the moBills application that I mentioned earlier on is showing up really within the market. And then a number of those renewals that Phil mentioned too are actually coming up for renewal this quarter, and our customers were signing up for longer terms in some cases, which I would take as a positive affirmation of the confidence in what we're doing here.

[Operator]

And your next question comes from the line of George Sutton from Craig-Hallum.

[George Sutton, analyst]

Phil, I've been around for the whole 15 years, and it's been a wild ride, but a great ride. Just for history purposes, on a split-adjusted basis, I think when you joined, it was a $6 stock. So it's obviously been lucrative for long-term shareholders. You, as a history buff, are, I know, very focused on your legacy, and you have always talked about sort of leaving ACI at the right time and place. I wondered if you could just address that in terms of -- what was the thought process in terms of the timing?

[Philip Heasley, executive]

Well, I don't think there's any -- I don't think I've ever tried to pretend to be anything but a transformational manager. I'm one of these guys that is kind of interested in what the world is supposed to look like, 5 or 10 or, in this case, 15 years out in the future. And we started this with a bunch of assets that were machine -- think about this company began 100% dependent on the HP NonStop computer, right? And you look at the companies that we were in there with, most of them have lost 40% to 60% of their value over the last 10 years. We've made 20 acquisitions, and we've spent R&D money. We've taken our investors -- and I thank all the investors. Many of you have been with us for this whole period, so I want to thank you for my piece of it. We've taken you on a roller coaster ride. We're -- probably our greatest skill set is not making quarters at times, and being more value-oriented than 90 days. It's actually not a 90-day business. It's a cool way of managing or measuring this business.

But we believed, 15 years ago, in the digital commerce marketplace and immediate payments and that we were going to go from being hardware-driven to software-driven. And most people thought we were nuts. And I am now leaving the company in which there is no debate in the marketplace about what the world is going to look like going forward. And we're right in the middle of the current. I think the expression I've used with you, George, was unlike Moses, I wanted to make it to the promised land. I wanted to make it from Egypt to Israel, and we've made it to Egypt -- to Israel.

But not being -- being a transformational manager, the company really deserves to now pursue scale in go-to-market because we have all the tools and whatnot. And it's great that we announced those 2 Azure deals, and it shows that we are cloud-relevant and we're going to become much, much more cloud-relevant and whatnot. Transformation is not the next chapter. I mean we'll always be transforming, but I forced this company to look inward, to work on acquisitions, to be a little bit less customer-centric at times because we force customers to move along with us in terms of technology changes and whatnot. They maybe will thank me in the second life for that, but they haven't always thanked me at the time. But I think we've done something that's significant. But I think that we only have a fraction of the potential value, and that value is going to come from having scale on a go-to-market thing. And that's not my forte. And it is the right time for me to do it.

We had a brief conversation in the middle of the year in which I kind of -- I didn't say, but I at least said I was thinking about this point in time. And I do believe it's the right point in time. I only have one constant in my life, and that's my very, very, very long-term marriage and my kids. All these other things are event-based. And I think this is the right event. And I'm very happy, and I'm very confident of the team's ability to keep going what we've developed. That's a long answer but...

[George Sutton, analyst]

Well, given it's been 15 years, it's hard to believe I'm still in my 30s, but I had one other question. You are in a rapidly consolidating industry. This company has been on the top of software banker lists of attractive M&A candidates for a long time. Obviously, when you see a change like this, that creates incremental interest. A hard question, but I think it's a relevant question and probably one a lot of people on the call are curious about, so I thought I'd ask.

[Philip Heasley, executive]

Yes, but that's about as appropriate as kissing your secretary. So I can't -- I'm not going to answer that, George, right?

[Operator]

Your next question comes from the line of Mark Palmer from BTIG.

[Mark Palmer, analyst]

I just wanted to get a little bit more perspective, particularly of the signing of the delayed contract. At the same time, the company did not raise guidance -- financial guidance for fiscal '19 or fiscal '20. Just want to get a sense of, is that just a question of getting clarity around the upside associated with that contract? Or is it a timing thing in terms of when it would kick in?

[Scott Behrens, executive]

Yes. No, we had contemplated these deals. If you recall, back at the beginning of the year, we had contemplated these as a part of our guidance. So our expectation was when we came out of 2018 that these 2 -- and we actually increased our EBITDA guidance at the beginning of this year in reflection of these deals carrying over from 2018. We didn't increase the guidance. They've been contemplated in our full year guidance.

[Philip Heasley, executive]

We actually made -- we actually had a learning. I won't say we had a mistake. When these 4 deals -- when the 4 mergers were announced, and it represented 8 customers of ours, we knew we had to figure out how to deal with it. We thought that delays and whatnot would be a function of announcement, and it's very clear that, that was wishful thinking. They were a function of the closing. So as these deals have closed, it's been very predictable in terms of how to rectify. And they've turned out the opportunities, and they're going to continue to turn out to be opportunities. And having known that simple little fact that I've just said, we would not have raised our EBITDA guidance at the beginning of the year when it first happened because we thought it was just this brief hiatus. We would have waited to now to raise it, and we didn't. It's a learning. I promise you we're not going to do that -- well, they're not going to do that going forward.

[Mark Palmer, analyst]

Okay. And one more question. Just with regard to the timetable with regard to succession, what is the thinking in terms of when a new CEO could be named? And how long has the search using an executive recruiter gone on? And what is the thinking about internal versus external candidates? And with that, I'll get back in the queue.

[Philip Heasley, executive]

Yes. Okay. Thank you. But I can answer a part of that. I'm not going to answer all of it, right? The Board has done a rigorous job of thinking through succession, and it's been a major topic for over 2 years at the company. And they've been working with these folks at Russell Reynolds, excellent team. At least, this is in the second year in which this whole process has been going on. That deliberation, that set of decisions and whatnot, is the purview of the Board, it's the responsibility of the Board, and I'm not going to trespass in terms of that, and I'm not going to try to handicap what their decisions are and whatnot. That's something that they will do, but I can tell you that they've been working diligently on this for -- it's been a major topic for a couple of years.

[Operator]

[Operator Instructions] Your next question comes from the line of Brett Huff from Stephens Inc.

[Brett Huff, analyst]

And Phil, I'll add my congratulations. We're sad to see you go, but I hope the next step is a good one.

My question -- one of my questions is about bookings. Scott, I think, if I'm remembering right, I think net new bookings were up 12% for the quarter, and you said, for 4Q, kind of stronger than that. Is that the right message?

[Scott Behrens, executive]

Yes. On an FX-adjusted basis, Q3 was up 15%. We expect to exit the year strong. Q4 should be even stronger than that, and so obviously exiting the year strong.

[Brett Huff, analyst]

And you didn't reiterate your net new bookings annual guidance of high-single to low-double. Is that still in force? Or is that -- or are we moving away from that?

[Scott Behrens, executive]

I would say moving away a bit. We were off quite a bit in the first half, but that's why I think it's important to kind of look at the momentum and how we delivered in Q3. We'll finish the year strong. We think that momentum will carry us into next year. I think a lot of that, obviously, didn't impact the revenue and EBITDA guidance. Where that's going to be important is building backlog for future years.

[Philip Heasley, executive]

Brett, we get a lot of pushback from advisers and Board members and whatnot, and they say software companies don't give bookings guidance and that it's not really -- it's a confusing category versus being a -- and when you kind of paint us in the same light as merchant acquirers and processors and whatnot, really looking at our bookings is -- it is a little bit, I suppose, apples and oranges and whatnot because we don't have -- the model doesn't -- the models just don't flow that way. And the more we become consumption-based, it makes it even more difficult and whatnot. And I think that's a valid -- it's a valid set of questions. And I think what Scott is trying to say is the slope going forward is much more important than taking a retro backwards or whatnot. But probably even more important than that, we have to figure out or they have to figure out a way of thinking about how revenue grows, right, and forecasting how revenue grows in a different way of dealing with bookings because in lots of cases, the -- when something is booked, there is as little as 9 months or 6 -- in some cases, a little less than 9 months and as much as 2 years before bookings become revenue. It's very different than processing and it's very different than the acquiring businesses as it relates to that. It's something that we have to do better, but we have to think about a better metric than bookings going forward. Craig and Scott and I have had that debate a little bit in terms -- especially on the consumption side of the business because it's certainly not apples-to-apples between consumption and On Premise. So we have to take that as a to-do in terms of giving -- because we try to be very transparent. And I think we will up giving false positives, false negatives in terms of how we do that. So I don't know if that's helpful or not.

[Brett Huff, analyst]

Yes. It is helpful. Follow-up question is on -- Phil, I think you mentioned that there were, I think, 8 customers and 4 mergers that were kind of in this capital markets bubble that we had last year and earlier this year. I understood that there were 2 deals that were delayed. How does the forward number kind of figure into this?

[Philip Heasley, executive]

Yes, there were. And I want to make sure we keep the same dialogue going. There's always been 4 deals, of which there were 2 delays. The other 2 are on -- they're -- we've kept them forecast as scheduled, right? You guys all know what the 4 -- I don't think I have to tell this group what the 4 deals were, right? I mean they're pretty straightforward. Two of the -- 2 sets of 2. So half of them we thought as scheduled, the other half we thought -- now this is the difference between bookings. This again where bookings is a little bit full, Scott. One of the 4 hasn't closed yet. And we -- every bid is expected to close, right? But if it doesn't close, that may impact a booking, right? And it may even for a quarter impact revenue. But we know that the subsequent -- we're very confident with the subsequent deal that comes from it. Like I said, as I was saying before, this is not a 90 -- trying to make this a nice and neat 90-day business is -- you don't do business 5 years at a clip and be able to explain it 90 days at a time other than thinking you're on a roller coaster. Did I further confuse you or did you...

[Brett Huff, analyst]

No. That's great. And then last, more qualitative. As these big mergers happen and these banks are made -- or these banks process are making big decisions to use your technology for another many, many, many years, right, maybe a decade or more, what is the overriding driver that drives them to ACIW? Is it the industrial strength? Is it the openness of the future-proofing like -- that's a strategic decision by them. Can you just give us a quick highlight of...

[Philip Heasley, executive]

Let me reiterate something and, of course, the cloud will reinforce this in a big way. Our new technology, what we've been working all these years on, right, if you had ACI's technology 10 years ago, 80% of the cost would have been hardware and middleware, and we would have been 20% of the cost so that if you were paying us -- if you were paying us $50 million over a period of time, you can consider that $200 million was being paid for hardware and middleware. And I'm not talking about premises and all that other kinds of stuff, just hardware and middleware. Our new software makes that $200 million $50 million, okay? So you save $150 million of the $200 million. Yes, we still charge you the $50 million, and we absolutely deserve -- we deserve more than that, right, because we've saved you the other $150 million. So if I was going forward 10 years and saying, gee, I got something that's costing me today $250 million in total, the ACI guys are $50 million, but now I have a future, and it's somewhat up to me how I -- if you're an existing customer, you have a task in front of you to transition it, but you've got a $200 million 5-year save in terms of that. That's pretty neat.

What we're now beginning to see is there's a lot of new guys coming into the market as the digital world is changing. What are you going to do, go buy some old school thing that's going to be 80% hardware and middleware and 20%? Or are you going to go with us and go on the cloud or you're going to go with us and go to Linux? The -- that's why this effort needs to be more about marketing and go-to-market than my buying and fixing companies to get us here because the opportunity is not minor, it's massive, right, in terms of the productivity that's -- this is the typical productivity that we're going to see throughout the digital economy, whereas $250 million capital investments are going to be replaced with $100 million capital investments. And that's what real -- that's what this whole transformation is about. And the only thing that's holding us back is, well, I think regulation has held the banks back for a long time. And -- but I certainly think that Visa and Mastercard are beginning to get it. JPMorgan is doing a fabulous job of -- this is the dawn of a new era, right? There's no reason in the world they wouldn't commit for a long time. And there's no reason in the world they wouldn't accrue those kinds of efficiencies. And by the way, this new environment can do 2, 3x the volume that the other one did, which is both good for us and good for them. Is that a good answer?

[Operator]

There are no more further questions at this time. Speakers, you may proceed.

[John Kraft, executive]

Well, thanks, everybody, for dialing in. We look forward to catching up in person and over the phone over the coming weeks. Have a good day, everybody.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.